Examine the causes of agricultural price fluctuations in your country.
- Perishability and difficulty of storage this forces farmers to sell at any available price e.g. tomato, cabbage
- Bulkiness of products makes mobility of products to areas of high price difficult.
- Long gestation period of agriculture products restricts supply when prices are high.
- Fluctuations of yield. High yields leads to low prices and low yields lead to high prices
- Low technology limits value addition to increase demand
- Technological advancement in developed countries has promoted the raw material saving methods reducing demand for agricultural output.
- Growing competition from synthetic substitutes
- Agricultural products are used as mere inputs industrial products making absorption of excess supply leading to price instability.
- The poorly planned production
- Dependence on natural factors such climate for production that are not predictable
- The price inelastic demand for agricultural products. a big change in price brings about a small change quantity demanded.
- Weak bargaining position on world market; prices of agricultural products are dictated by importers in MDCs.
- Lack access to market information
- Speculations of demand
- Change in the import-export policy;
- Inflation
- Seasonal nature of demand for certain products; such as flowers in celebration seasons.
CATEGORIES Economics
TAGS Dr. Bbosa Science
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